\u3000\u3 Shengda Resources Co.Ltd(000603) 486 Ecovacs Robotics Co.Ltd(603486) )
Core view
Event: the company announced that the annual report of 2021 and the first quarterly report of 2022 achieved an operating revenue of 13.086 billion yuan in 2021, a year-on-year increase of 80.90%; The net profit attributable to the parent company was 2.010 billion yuan, a year-on-year increase of 213.51%. In the first quarter of 2022, the revenue was 3.201 billion yuan, a year-on-year increase of 43.90%; The net profit attributable to the parent company was 424 million yuan, a year-on-year increase of 27.20%.
Core view
Ecovacs Robotics Co.Ltd(603486) + double wheel drive of Tianke brand, with continued high growth of revenue in 2022q1. By product, in 2021, the company’s own brand / OEM business / other businesses achieved revenue of RMB 11.847992 billion respectively, with a year-on-year increase of 116% / – 36% respectively. Among them, Ecovacs Robotics Co.Ltd(603486) and Tianke brands achieved revenues of RMB 6.710 billion and RMB 5.137 billion respectively, with a year-on-year increase of 58% and 308% respectively. In 2021, the company successively launched self-cleaning flagship sweepers N9 + and x1, and actively supplemented emerging categories such as windowbao and Qinbao, driving the steady expansion of Ecovacs Robotics Co.Ltd(603486) brand revenue. Referring to the statistics of ovicloud, the online / offline market share of Ecovacs Robotics Co.Ltd(603486) sweepers in 2021 was 45% / 87% respectively, with a year-on-year increase of 4pct / 8pct respectively; In addition, the company launched Fuwan 2.0 floor washing machine according to the pain points of user needs. After the product was launched, it quickly became a popular model in the market. The annual sales revenue exceeded 2 billion yuan, helping Tianke brand maintain high growth. In 2022q1, the independent brand business of the company maintained high growth, and the revenue of Ecovacs Robotics Co.Ltd(603486) , Tianke brands increased by 50% and 85% respectively year-on-year. According to the statistics of ovicloud, seven products of 2022q1 company rank among the top 10 in the best-selling list of cleaning appliances, among which X1 Omni and Fuwan 2.0 rank in the top two Ecovacs Robotics Co.Ltd(603486) , Tianke’s sales share in China’s clean electrical appliances online market in 2021q1 was 18% and 13% respectively, with a year-on-year increase of 0.2pct and 4pct.
The proportion of independent brand revenue increased, the marketing investment continued to increase, and the net interest rate in 2022q1 decreased slightly year-on-year. The gross profit margin of 2021q4 company was 54.68%, with a year-on-year increase of 4pct under comparable standards, which was mainly due to the continuous increase in the proportion of the company’s high gross profit independent brand revenue (a year-on-year increase of 15pct in 2021), and the increase in the proportion of high priced flagship products LED to the upward rise of the price center (the average price of household services Siasun Robot&Automation Co.Ltd(300024) , intelligent living appliances increased by 44% and 19% respectively year-on-year in 2021). In order to cooperate with the launch of new products, the company’s marketing expenses have been increased accordingly. The sales expense rate of 2021q4 company has reached 27.76%, with a year-on-year increase of 2pct under comparable caliber. Over the same period, the company achieved a net profit attributable to the parent company of 14.04%, an increase of about 1PCT year-on-year. In 2022q1, the company achieved a gross profit margin of 49.53%, a year-on-year increase of 3PCT; On the expense side, the company maintained the strategy of high and high expenses. During Q1, the expense rate increased by 7pct year-on-year, of which the sales expense rate increased by 4pct; In the same period, the net interest rate attributable to the parent company was 13.23%, a year-on-year decrease of 2pct. In the future, with the decline of the high price of raw materials and the further optimization of the company’s product structure, the profitability is expected to continue to improve.
Product innovation has consolidated its leading edge, the omni-channel layout has been gradually improved, and the growth momentum is strong. On the product side, in line with the market trend of self-cleaning popularization, the company further enriches the matrix of self-cleaning series products, widens the price band, and drives the release of demand for floor sweepers; In addition, the company actively improves the product ecology of Tianke, quickly iterates the intelligent cooking machine of Shiwan, and cultivates new momentum for brand development. On the channel side, the company continues to cultivate the main online battlefield, actively embrace the emerging marketing model and improve the brand drainage ability; At the same time, we will strengthen the expansion of offline channels and open brand flagship stores in the core business circle. The leading position of all channels is becoming more and more stable, and the growth momentum in the future is relatively strong.
Profit forecast and investment suggestions
In combination with the company’s marketing efforts, the assumption of appropriately raising the sales expense ratio is predicted that the company’s net profit attributable to the parent company from 2022 to 2024 will be 2.641/34.47/41.06 billion (previously predicted to be 2.793/3.590 billion yuan from 2022 to 2023), and the target valuation of DCF will be 134.47 yuan to maintain the “buy” rating.
Risk tips
R & D innovation is less than expected; Industry competition intensifies; Uncertainty risk of trade friction
